Legislature(2007 - 2008)BUTROVICH 205

04/12/2007 03:30 PM Senate JUDICIARY


Download Mp3. <- Right click and save file as

Audio Topic
03:37:29 PM Start
03:38:10 PM SB104
06:31:05 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 104 NATURAL GAS PIPELINE PROJECT TELECONFERENCED
Heard & Held
Public Testimony 5:30 pm to 7:00 pm
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE JUDICIARY STANDING COMMITTEE                                                                             
                         April 12, 2007                                                                                         
                           3:37 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Hollis French, Chair                                                                                                    
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Bill Wielechowski                                                                                                       
Senator Lesil McGuire                                                                                                           
Senator Gene Therriault                                                                                                         
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 104                                                                                                             
"An  Act   relating  to  the   Alaska  Gasline   Inducement  Act;                                                               
establishing   the  Alaska   Gasline   Inducement  Act   matching                                                               
contribution  fund; providing  for an  Alaska Gasline  Inducement                                                               
Act coordinator; making conforming  amendments; and providing for                                                               
an effective date."                                                                                                             
     HEARD AND HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 104                                                                                                                  
SHORT TITLE: NATURAL GAS PIPELINE PROJECT                                                                                       
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
03/05/07       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/05/07       (S)       RES, JUD, FIN                                                                                          
03/14/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/14/07       (S)       Heard & Held                                                                                           
03/14/07       (S)       MINUTE(RES)                                                                                            
03/16/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/16/07       (S)       Heard & Held                                                                                           
03/16/07       (S)       MINUTE(RES)                                                                                            
03/19/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/19/07       (S)       Heard & Held                                                                                           
03/19/07       (S)       MINUTE(RES)                                                                                            
03/21/07       (S)       RES AT 3:30 PM SENATE FINANCE 532                                                                      
03/21/07       (S)       Heard & Held                                                                                           
03/21/07       (S)       MINUTE(RES)                                                                                            
03/21/07       (S)       RES AT 5:30 PM SENATE FINANCE 532                                                                      
03/21/07       (S)       Heard & Held                                                                                           
03/21/07       (S)       MINUTE(RES)                                                                                            
03/22/07       (S)       RES AT 4:15 PM FAHRENKAMP 203                                                                          
03/22/07       (S)       Heard & Held                                                                                           
03/22/07       (S)       MINUTE(RES)                                                                                            
03/23/07       (S)       RES AT 1:30 PM BUTROVICH 205                                                                           
03/23/07       (S)       Heard & Held                                                                                           
03/23/07       (S)       MINUTE(RES)                                                                                            
03/24/07       (S)       RES AT 1:00 PM SENATE FINANCE 532                                                                      
03/24/07       (S)       Heard & Held                                                                                           
03/24/07       (S)       MINUTE(RES)                                                                                            
03/24/07       (S)       RES AT 3:00 PM SENATE FINANCE 532                                                                      
03/24/07       (S)       Heard & Held                                                                                           
03/24/07       (S)       MINUTE(RES)                                                                                            
03/26/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/26/07       (S)       Heard & Held                                                                                           
03/26/07       (S)       MINUTE(RES)                                                                                            
03/27/07       (S)       RES AT 3:00 PM BUTROVICH 205                                                                           
03/27/07       (S)       Heard & Held                                                                                           
03/27/07       (S)       MINUTE(RES)                                                                                            
03/28/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/28/07       (S)       Heard & Held                                                                                           
03/28/07       (S)       MINUTE(RES)                                                                                            
03/29/07       (S)       RES AT 5:00 PM BUTROVICH 205                                                                           
03/29/07       (S)       Heard & Held                                                                                           
03/29/07       (S)       MINUTE(RES)                                                                                            
03/30/07       (S)       RES AT 1:30 PM BUTROVICH 205                                                                           
03/30/07       (S)       Heard & Held                                                                                           
03/30/07       (S)       MINUTE(RES)                                                                                            
03/31/07       (S)       RES AT 12:00 AM BUTROVICH 205                                                                          
03/31/07       (S)       Heard & Held                                                                                           
03/31/07       (S)       MINUTE(RES)                                                                                            
04/01/07       (S)       RES AT 11:00 AM BUTROVICH 205                                                                          
04/01/07       (S)       Moved CSSB 104(RES) Out of Committee                                                                   
04/01/07       (S)       MINUTE(RES)                                                                                            
04/02/07       (S)       RES RPT CS  6AM   SAME TITLE                                                                           
04/02/07       (S)       AM: HUGGINS, GREEN, STEVENS, STEDMAN,                                                                  
                         WIELECHOWSKI, WAGONER                                                                                  
04/02/07       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/02/07       (S)       Moved Out of Committee 4/1/07                                                                          
04/02/07       (S)       MINUTE(RES)                                                                                            
04/04/07       (S)       JUD AT 2:45 PM BELTZ 211                                                                               
04/04/07       (S)       Heard & Held                                                                                           
04/04/07       (S)       MINUTE(JUD)                                                                                            
04/11/07       (S)       JUD AT 1:30 PM BUTROVICH 205                                                                           
04/11/07       (S)       Heard & Held                                                                                           
04/11/07       (S)       MINUTE(JUD)                                                                                            
04/11/07       (S)       JUD AT 5:30 PM BUTROVICH 205                                                                           
04/11/07       (S)       Heard & Held                                                                                           
04/11/07       (S)       MINUTE(JUD)                                                                                            
04/12/07       (S)       JUD AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Larry Ostrovsky, Chief Assistant Attorney General                                                                               
Oil, Gas & Mining Section                                                                                                       
Department of Law (DOL)                                                                                                         
Anchorage, AK                                                                                                                 
POSITION STATEMENT:  Provided information related to SB 104                                                                   
                                                                                                                                
Marty Rutherford, Deputy Commissioner                                                                                           
Department of Natural Resources                                                                                                 
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Provided information related to SB 104                                                                   
                                                                                                                                
Marcia Davis, Deputy Commissioner                                                                                               
Department of Revenue                                                                                                           
Juneau, AK                                                                                                                      
POSITION STATEMENT:  Provided information related to SB 104                                                                   
                                                                                                                                
Bonnie Harris, Senior Assistant Attorney General                                                                                
Civil Division                                                                                                                  
Oil, Gas & Mining Section                                                                                                       
Department of Law                                                                                                               
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Provided information related to SB 104                                                                   
                                                                                                                                
Paul Kendall                                                                                                                    
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Supported SB 104                                                                                         
                                                                                                                                
Paul Laird, General Manager                                                                                                     
Alaska Support Industry Alliance                                                                                                
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Supported SB 104                                                                                       
                                                                                                                                
Jerry McCutchen                                                                                                                 
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Offered suggestions on SB 104                                                                            
                                                                                                                                
Merrick Pierce                                                                                                                  
North Pole, AK                                                                                                                  
POSITION STATEMENT:  Offered an amendment to SB 104                                                                           
                                                                                                                                
Joey Merrick, Business Manager                                                                                                  
Alaska Laborers Local 341                                                                                                       
Eagle River, AK                                                                                                                 
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
Pat Falon, Marketing Representative                                                                                             
Alaska Laborers Local 341                                                                                                       
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
Tammie Wilson                                                                                                                   
Fairbanks, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
Michael Friborg, Business Agent                                                                                                 
Local IUOE 302                                                                                                                  
Fairbanks, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
Jon Brown                                                                                                                       
Local IUOE 302                                                                                                                  
Fairbanks, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
Barbara Huff Tuckness, Lobbyist                                                                                                 
Director of Legislative and Governmental Affairs                                                                                
Teamsters Local 959                                                                                                             
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Supported SB 104                                                                                         
                                                                                                                                
Jim Laiti, Manager                                                                                                              
Plumbers and Steamfitters Local 375                                                                                             
Fairbanks, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement and apprenticeship programs                                                                                           
                                                                                                                                
Tim Sharp, Business Manager                                                                                                     
Alaska District Council of Laborers                                                                                             
Fairbanks, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
Travis Tolman, Apprentice                                                                                                       
Laborers Local 341                                                                                                              
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
Dennis Knebel, Business Development Coordinator                                                                                 
IBEW Local 1547                                                                                                                 
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
Vince Beltrami, President                                                                                                       
Alaska AFL-CIO                                                                                                                  
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Supported  SB  104  with a  project  labor                                                             
agreement                                                                                                                       
                                                                                                                                
David Gottstein, Co-Chair                                                                                                       
Backbone                                                                                                                        
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Supported AGIA - SB 104                                                                                  
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  HOLLIS   FRENCH  called  the  Senate   Judiciary  Standing                                                             
Committee meeting to order at 3:37:29  PM. Present at the call to                                                             
order  were  Senator  Huggins, Senator  Wielechowski,  and  Chair                                                               
French. Senator  Therriault and  Senator McGuire  arrived shortly                                                               
thereafter.                                                                                                                     
                                                                                                                                
              SB 104-NATURAL GAS PIPELINE PROJECT                                                                           
                                                                                                                              
CHAIR   FRENCH  announced   the  committee   will  continue   the                                                               
consideration  of SB  104.  Recapping  yesterday's discussion  he                                                               
asked if the administration has  a perspective on whether the gas                                                               
pipeline  coordinator has  a  term  of office  or  if the  person                                                               
serves at the pleasure of the governor.                                                                                         
                                                                                                                                
3:38:10 PM                                                                                                                    
MARTY  RUTHERFORD,  Deputy  Commissioner, Department  of  Natural                                                               
Resources, stated  the preference  that the  person serve  at the                                                               
pleasure  of  the  governor. Furthermore  she  prefers  that  the                                                               
office  reside  within the  Department  of  Natural Resources  to                                                               
accommodate coordination with the other joint pipeline office.                                                                  
                                                                                                                                
CHAIR  FRENCH  stated that  where  the  office  is placed  is  an                                                               
executive   decision,  but   he  did   have  several   conceptual                                                               
amendments to  suggest with regard  to the  coordinator position.                                                               
On  page 20,  line 3,  insert "position"  at end  of sentence  to                                                               
clarify that  this is a  position rather  than a person.  He also                                                               
suggested adding  language to make  it clear that  the inducement                                                               
act  coordinator   serves  at  the  pleasure   of  the  governor.                                                               
Ultimately  the  governor  is  the  chief  executive  so  if  the                                                               
coordinator  starts making  poor decisions,  the governor  should                                                               
have the authority to remove that person.                                                                                       
                                                                                                                                
CHAIR  FRENCH noted  the timeframe  between  the appointment  and                                                               
confirmation by the legislature,  and questioned whether there is                                                               
a  legal   distinction  between  the  coordinator's   powers  and                                                               
authority  before confirmation.  In the  event that  the governor                                                               
has  to  remove  one  coordinator   and  appoint  another,  there                                                               
shouldn't  be an  inability to  move forward  simply because  the                                                               
legislature  hasn't  been  assembled  for  the  confirmation,  he                                                               
stated.                                                                                                                         
                                                                                                                                
3:41:39 PM                                                                                                                    
MR.  OSTROVSKY,  Chief Assistant  Attorney  General,  Oil, Gas  &                                                               
Mining Section,  Department of Law (DOL),  acknowledged that this                                                               
is  a unique  position  and he  isn't sure  whether  it would  be                                                               
treated the  same as  a state commissioner  or not.  However, the                                                               
legislature  would remove  any ambiguity  by  describing it  that                                                               
way.                                                                                                                            
                                                                                                                                
CHAIR FRENCH suggested that the  same concept should apply to the                                                               
commissioners  to  clarify  that  they have  the  full  authority                                                               
granted in  the bill to  keep the  project moving forward  on the                                                               
day they are appointed.                                                                                                         
                                                                                                                                
MR.   OSTROVSKY  said   he  believes   commissioners  have   that                                                               
authority.                                                                                                                      
                                                                                                                                
CHAIR FRENCH said  there's no need to change it  if it's existing                                                               
law, but the committee would make  it explicit with regard to the                                                               
inducement act coordinator since that is a new position.                                                                        
                                                                                                                                
3:42:53 PM                                                                                                                    
Senator McGuire joined the committee.                                                                                           
                                                                                                                                
CHAIR FRENCH, finding no further  questions about the position or                                                               
powers  of  the  inducement  coordinator,  asked  Ms.  Harris  to                                                               
address expedited judicial review.                                                                                              
                                                                                                                                
BONNIE   HARRIS,  Senior   Assistant   Attorney  General,   Civil                                                               
Division,  Oil,   Gas  &  Mining  Section,   Department  of  Law,                                                               
Anchorage,  said  she's  organized   her  thoughts  on  expedited                                                               
judicial review  into three  broad areas. The  first is  what the                                                               
review is  under the current  Senate CS.  For the most  part that                                                               
would  be appellate  action, she  said. Next  is how  an original                                                               
action might  occur and which  laws would apply. She  opined that                                                               
an original action  would most likely be raised  as a declaratory                                                               
judgment  action. Finally  there's  the question  of which  court                                                               
would  review an  appeal or  declaratory judgment  action on  the                                                               
license or on the bill.                                                                                                         
                                                                                                                                
MS. HARRIS explained in that  in the current committee substitute                                                               
[25-GS1060\K],   Sections    43.90.190   and    43.90.200   refer                                                               
respectively  to the  appeal process  for decisions  to issue  no                                                               
license and a  decision by the commissioners to  issue a license.                                                               
Under  Section  43.90.190(b)  and   (c),  the  commissioners  are                                                               
required  to  make a  written  finding  if  they decide  that  no                                                               
applicant should be issued a license.                                                                                           
                                                                                                                                
CHAIR FRENCH  asked her to  review what  it means to  act jointly                                                               
and how the  commissioners to come to a decision  using the legal                                                               
terminology "jointly."                                                                                                          
                                                                                                                                
MS.  HARRIS  explained that  the  decisions  would have  to  come                                                               
jointly from their authority.                                                                                                   
                                                                                                                                
CHAIR FRENCH  asked what happens  from a layman's  perspective if                                                               
the commissioners  have a difference  of opinion with  respect to                                                               
making a decision.                                                                                                              
                                                                                                                                
MS.  HARRIS  replied it  would  be  much  the  same as  with  the                                                               
discussion yesterday  where the  pipeline coordinator  might want                                                               
to take a  different position than the  commissioners. "I imagine                                                               
it  would be  resolved administratively  with a  decision by  the                                                               
governor," she said.                                                                                                            
                                                                                                                                
CHAIR  FRENCH asked  if there's  a legal  definition for  "acting                                                               
jointly" or if it's meant in the common English sense.                                                                          
                                                                                                                                
MR. OSTROVSKY said  he believes it's meant in  the common English                                                               
sense, which  is that  both commissioners would  sign off  on any                                                               
decisions  that need  to be  made. If  a decision  requires joint                                                               
action and the commissioners aren't  able to agree, then it's not                                                               
a decision.                                                                                                                     
                                                                                                                                
MS.  HARRIS agreed;  her understanding  is that  one commissioner                                                               
could not take  an action where joint action is  required. Use of                                                               
the  term commissioners  in  the  plural is  defined  as the  two                                                               
acting jointly.  The provision that  allows the  commissioners to                                                               
make regulations  to implement the  act states authority  for the                                                               
commissioners  jointly to  implement the  act. It  also expresses                                                               
authority   for   the   commissioners  independently   to   adopt                                                               
regulations.  The  authority  for  the  commissioner  of  natural                                                               
resources  is   under  Title  38   and  the  authority   for  the                                                               
commissioner of revenue is under Title 43.                                                                                      
                                                                                                                                
3:46:42 PM                                                                                                                    
Senator Therriault joined the committee.                                                                                        
                                                                                                                                
MS. HARRIS  explained that after the  commissioners have reviewed                                                               
the applications and  made a best interest sort  of finding, they                                                               
give  public notice  and send  notice to  the legislature  of the                                                               
intent to  issue a license.  If the commissioners decide  that no                                                               
application  sufficiently meets  the  requirements  to warrant  a                                                               
license, then  they will  issue a  written best  interest finding                                                               
determination  that no  license  will be  issued.  A decision  to                                                               
issue no  license is  a final  agency action  that is  subject to                                                               
appeal to  superior court  within 30  days of  the date  that the                                                               
final agency  action is  made public.  The timeframe  is provided                                                               
under the court  rules and the Administrative  Procedures Act. On                                                               
the other hand,  a notice of intent to issue  a license that goes                                                               
to the  legislature does not  become a final agency  action until                                                               
the commissioners issue a license,  which under Section 43.90.200                                                               
would not  occur until  the legislature  approves the  license by                                                               
resolution.  So  the notice  of  intent  to  issue a  license  is                                                               
subject to appeal and the finding  behind it is subject to appeal                                                               
when the license is issued.  Challenges on either would more than                                                               
likely be challenges to the  administrative record. Definitely it                                                               
would be  a challenge to  the administrative  record if it  was a                                                               
decision to issue no license  because that decision goes straight                                                               
from  the agency  to the  court. Because  a decision  to issue  a                                                               
license has  a stop at the  legislature, it would probably  be an                                                               
appeal on  the administrative record, but  conceivably anyone who                                                               
appealed would also  bring in the legislative history  of the act                                                               
or the legislative approval of the resolution.                                                                                  
                                                                                                                                
3:49:30 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked if her  assumption is that  an appeal                                                               
would be  on the written record  and that the court  would uphold                                                               
the  decision if  there was  substantial evidence  supporting the                                                               
agency decision.                                                                                                                
                                                                                                                                
MS.  HARRIS said  she believes  it's "substantial  evidence where                                                               
the factual  findings of the agency  on a rational basis  for the                                                               
determination on the application of the law."                                                                                   
                                                                                                                                
SENATOR WIELECHOWSKI asked  if there's any danger  that the court                                                               
would allow a trial de novo type of situation.                                                                                  
                                                                                                                                
MS.  HARRIS said  in  her  experience a  trial  de  novo in  that                                                               
circumstance would be unlikely. The  courts are reluctant to step                                                               
into  a  whole  new  proceeding  or an  expanded  review  of  the                                                               
administrative  record. However  the  court  does have  statutory                                                               
discretion to do that, she stated.                                                                                              
                                                                                                                                
SENATOR  WIELECHOWSKI asked  if there's  any way  to change  this                                                               
such that  it is not  a final  agency action, because  that gives                                                               
such  tremendous  rights  to  appeal.  If  it's  an  act  by  the                                                               
legislature,  on  the  other  hand,   the  only  way  it  can  be                                                               
challenged is on constitutional issues.                                                                                         
                                                                                                                                
MR.  OSTROVSKY  noted that  the  bill  has evolved  somewhat.  As                                                               
originally introduced  the license would become  effective if the                                                               
legislature did not disapprove. At  that point it becomes a final                                                               
agency  action.  A party  could  make  an administrative  appeal-                                                               
unless there  were some  external issues-that  would be  based on                                                               
the record and  would include briefing. As  currently written the                                                               
bill  is  based  on  legislative   approval,  which  provides  an                                                               
intermediate  step   between  the  commissioners'   decision  and                                                               
issuance of the license. DOL's view  is that would take it out of                                                               
the  realm of  administrative appeal  because the  commissioners'                                                               
decision  would   have  been  superseded  by   the  legislature's                                                               
determination. Once the legislature  has acted, probably the only                                                               
avenue for challenge would be on constitutional issues.                                                                         
                                                                                                                                
SENATOR WIELECHOWSKI  asked if Section  43.90.190(c) needs  to be                                                               
cleared  up   then  because  it  says   that  the  commissioners'                                                               
determination under (b) is a  final agency action for purposes of                                                               
appeal.                                                                                                                         
                                                                                                                                
MS. HARRIS explained that what  was formerly Section 43.90.190(a)                                                               
says that  it's a final  agency action after the  legislature has                                                               
acted to  approve the license.  The decision to issue  no license                                                               
is final  when it's  issued. "If  you wanted  to change  that you                                                               
would  change…190 and  a…housekeeping  change to  200 would  also                                                               
probably have to be done."                                                                                                      
                                                                                                                                
SENATOR WIELECHOWSKI  reminded members  that Senator  Ted Stevens                                                               
cautioned  the  legislature  to  make  this  as  bullet-proof  as                                                               
possible.  He  agrees  because getting  mired  in  appeals  could                                                               
potentially  cost  years.  This   committee  needs  to  focus  on                                                               
avoiding letting parties  make endless appeals. I'd  like to work                                                               
with the  administration to try to  figure out ways to  do that,"                                                               
he stated.                                                                                                                      
                                                                                                                                
CHAIR FRENCH asked Ms. Harris to continue.                                                                                      
                                                                                                                                
3:54:29 PM                                                                                                                    
MS.  HARRIS  recapped  that  she  had  gone  through  the  appeal                                                               
procedures as  she reads them  in the SRES  committee substitute.                                                               
She  continued  to  explain  that  another way  for  a  party  to                                                               
challenge is  to bring an original  action to court asking  it to                                                               
declare how  the AGIA  law affects their  interest. For  the most                                                               
part people think that the  tax exemption provision under AGIA is                                                               
what will be challenged on  constitutional grounds, she observed.                                                               
In that  regard she  said there's  a body  of law  in Alaska-most                                                               
recently, Anchorage Chrysler v.  Daimler Chrysler in 2006-on what                                                               
the  parameters  of  a  declaratory   judgment  action  are.  The                                                               
legislature by statute  vested the superior court  with the power                                                               
to render declaratory judgments, she  stated. The standard in law                                                               
is that "in the case  of actual controversy…, the superior court,                                                               
…may  declare the  rights and  legal relations  of an  interested                                                               
party…, whether  or not  further relief is  or could  be sought."                                                               
Thus a court  has the discretion, on the filing  of an action for                                                               
declaratory judgment, to take that up.  She added that one of the                                                               
cases included  a statement that  "a court may  grant declaratory                                                               
relief, in its discretion, when to  do so serves a useful purpose                                                               
in clarifying and settling the rights  of parties or when it will                                                               
terminate and relieve uncertainty  giving rise to the preceding."                                                               
Also, under  Alaska law there's a  series of tests for  the court                                                               
to determine  whether or not  to grant declaratory  judgment. She                                                               
explained that the declaratory part  simply means to declare what                                                               
that particular party's rights are in the context of this law.                                                                  
                                                                                                                                
3:56:55 PM                                                                                                                    
CHAIR  FRENCH asked  for  a  more concrete  example  so that  the                                                               
committee  and the  public could  follow what  sort of  instances                                                               
might bring these declaratory judgment actions.                                                                                 
                                                                                                                                
MS.  HARRIS said  Anchorage Chrysler  v. Daimler  Chrysler was  a                                                               
breach of contract action. In  that case Daimler Chrysler claimed                                                               
that the  contract required Anchorage  Chrysler to  remodel their                                                               
building and Anchorage Chrysler  disagreed. "The court…found that                                                               
there was  a controversy  in the way  the contract  read-that the                                                               
court  would decide  before  the  breach happened."  [Declaratory                                                               
judgments  are appropriate  to resolve  pre-breach disputes  over                                                               
contractual language,  giving useful guidance for  the parties or                                                               
others contemplating  a contingent course of  action.13 Anchorage                                                               
Chrysler    Center,   Inc.    v.   DaimlerChrysler    Corporation                                                               
(02/24/2006) sp-5993, 129 P3d 905]                                                                                              
                                                                                                                                
CHAIR FRENCH said what  he's trying to get at is  who might go to                                                               
court seeking declaratory judgment of their rights under AGIA.                                                                  
                                                                                                                                
MS. HARRIS said when the legislature  passes the bill and AGIA is                                                               
enacted, anybody could bring a claim that it's unconstitutional.                                                                
                                                                                                                                
CHAIR  FRENCH  agreed  that's  the   clearest  and  most  obvious                                                               
example.                                                                                                                        
                                                                                                                                
MS.  HARRIS said  another  example  would be  when  a license  is                                                               
issued.   A  disgruntled   applicant  or   perhaps  anyone   with                                                               
citizen/taxpayer  standing  could  bring  the  action  saying  it                                                               
violates  the  constitution.  Another   clear  example  would  be                                                               
potential  shippers before  the  first open  season. A  potential                                                               
shipper could ask  for a declaratory judgment before  they had to                                                               
bid  in  the  open  season  to  determine  what  affect  the  tax                                                               
exemption  would  have.  The  question   would  be  would  it  be                                                               
sustained or  would it  be something  that the  legislature could                                                               
change after the shipper has committed to firm transportation.                                                                  
                                                                                                                                
CHAIR FRENCH asked if it's  almost always an interested party. In                                                               
this  case  someone that's  involved  in  the process  who  wants                                                               
clarification about their rights and duties under the AGIA bill.                                                                
                                                                                                                                
MS. HARRIS said  it would almost always be  an interested person,                                                               
but  it could  be a  taxpayer who  is interested  in the  broader                                                               
sense  of  the  public  fisc.  "But a  person  whose  rights  are                                                               
affected more directly would be  more likely to succeed in asking                                                               
a  court to  take  a declaratory  judgment  action." A  potential                                                               
shipper would fit that description, she stated.                                                                                 
                                                                                                                                
CHAIR FRENCH  said part  of the  reason for  addressing expedited                                                               
judicial review is to ask if  anything in the bill says the court                                                               
has to  get going  and hear an  AGIA claim.  Senator Wielechowski                                                               
has highlighted  the concern  that many  Alaskans have,  which is                                                               
that this not get tied up in court endlessly.                                                                                   
                                                                                                                                
MS. HARRIS  advised that nothing  specifically directs  the court                                                               
to  get  going,  but  there's   the  90-day  period  for  raising                                                               
constitutional challenges  and then  there are the  30-day appeal                                                               
periods that are inherent in the administrative action.                                                                         
                                                                                                                                
CHAIR FRENCH  said those are  directed at the  interested parties                                                               
and the citizens,  but once the claim is filed  in superior court                                                               
we would  have to trust  the court  system to move  swiftly. With                                                               
that in mind he suggested that now  is the time to talk about the                                                               
pros  and cons  of trying  to direct  the court  system to  treat                                                               
these  claims  in  an  expedited  manner. He  asked  if  she  has                                                               
something prepared to address that.                                                                                             
                                                                                                                                
MS.  HARRIS   advised  that  the   constitution  does   give  the                                                               
legislature  the  authority to  decide  the  jurisdiction of  the                                                               
supreme court and the superior  court. Article IV, Section 1 says                                                               
there is  a supreme court  and it is  a court of  final appellate                                                               
jurisdiction. It  doesn't say that  the supreme court  can't hear                                                               
other  kinds of  cases such  as an  original action  that doesn't                                                               
come  up   as  an  appeal   from  a   lower  court  or   from  an                                                               
administrative  action. Right  now the  Declaratory Judgment  Act                                                               
and the Administrative  Procedures Act have all  appeals going to                                                               
superior court.  According to  her research  it appears  that the                                                               
legislature would have  authority to direct the  supreme court to                                                               
take a matter  as an original action. She noted  that the supreme                                                               
court already  has that authority  with its  discretion. However,                                                               
she  would caution  that  there  is a  specter  of separation  of                                                               
powers issue  between the  legislature and  the judiciary  so the                                                               
legislature should  take care in  exercising the authority  as it                                                               
exists.                                                                                                                         
                                                                                                                                
CHAIR FRENCH  remarked that original jurisdiction  in the supreme                                                               
court has  come up before and  he's been leery of  that idea. You                                                               
can  put original  jurisdiction  in the  supreme  court, but  the                                                               
first thing  the court will  do is appoint  a master to  hear the                                                               
facts.  More than  likely the  master  will be  a superior  court                                                               
judge and  the fact-finding  mission the  master engages  in will                                                               
look very much  like a trial. "It seems to  me that you're simply                                                               
recreating…the  current system  as  it stands,"  he stated.  That                                                               
doesn't necessarily address the real  concern, which is trying to                                                               
get  a quick  judgment out  of the  supreme court.  He said  he's                                                               
thinking about an amendment along  the lines that the court shall                                                               
hear claims  relating to  the particular title  and chapter  in a                                                               
most  expeditious manner  that comports  with  the boundaries  of                                                               
justice. He  isn't sure that  the legislature can tell  the court                                                               
to  do this  on  a  six-month timetable,  but  that  is the  most                                                               
concrete way  to deal with  the concern that Senator  Stevens and                                                               
Senator Wielechowski  have expressed. "I…need to  articulate that                                                               
here because  that's the easiest thing  to do. Just write  a rule                                                               
that says they have  to do it in six-months, but  I think most of                                                               
us are aware  that that would…be a flagrant  separation of powers                                                               
violation." The  court can't  be commanded  to do  its work  in a                                                               
certain length  of time, but it  is possible to ask  the court to                                                               
act as fast  as possible consistent with the  principles of equal                                                               
protection and efficient use of its time, he stated.                                                                            
                                                                                                                                
MS. HARRIS opined  that it would be possible to  ask the court to                                                               
take the action  within a certain amount of time.  She added that                                                               
the  comments about  the master  are correct.  The DOL  appellate                                                               
division has said  that appointing a master might  be faster, but                                                               
others have expressed the view that it would not be faster.                                                                     
                                                                                                                                
SENATOR WIELECHOWSKI  pointed out that  if the supreme  court was                                                               
given  original  jurisdiction  in  this  case  you'd  bypass  the                                                               
superior court  and the appellate division,  which would probably                                                               
result in  a significant  time savings.  He asked  if she  had an                                                               
idea about how much time it would save.                                                                                         
                                                                                                                                
MS. HARRIS  said an administrative  appeal would probably  take a                                                               
couple of years to get through court.                                                                                           
                                                                                                                                
SENATOR  WIELECHOWSKI  said that's  opposed  to  a supreme  court                                                               
original jurisdiction, which would take a few months.                                                                           
                                                                                                                                
MS. HARRIS agree it could be  that short, but it could be longer.                                                               
She outlined  the process  in which a  master would  be appointed                                                               
and  given a  reference of  what  matters to  decide. The  master                                                               
would potentially  examine the  evidence and  then report  to the                                                               
supreme court  on findings of  fact and conclusions of  law. Then                                                               
the  parties would  have  the opportunity  to  take exception  to                                                               
provisions  in  the  master's  report. She  noted  that  the  DOL                                                               
appellate  division  has said  that  parties  are generally  very                                                               
cautious  about  what they  take  exception  to because  that  is                                                               
argued to  the supreme court.  The supreme  court may or  may not                                                               
concur with master,  but that report is the  supreme court's sort                                                               
of trial court.                                                                                                                 
                                                                                                                                
CHAIR FRENCH  suggested it's  time to  think about  the practical                                                               
applications of this scenario.                                                                                                  
                                                                                                                                
MR.  OSTROVSKY   added  that   if  there's   an  appeal   of  the                                                               
administrative  decision, the  superior court  orders the  record                                                               
prepared in 40  days then the court schedules  briefing, which is                                                               
30-days for  each side.  Then the court  hears oral  argument and                                                               
renders a decision within 180-days.  When there's no intermediate                                                               
appeal, it goes  right to the supreme court.  DOL doesn't believe                                                               
that original  jurisdiction speeds the process  up substantially,                                                               
he said. What  happens is it'd go to supreme  court and a factual                                                               
record would be developed or there  would be a factual hearing on                                                               
the record. The  court would probably appoint a  master who would                                                               
order  the record  to be  assembled and  hear oral  arguments and                                                               
issue a  decision. He isn't  sure if it  would be subject  to the                                                               
same  180-days, but  he  would  note that  the  supreme court  is                                                               
subject  to the  180-days  only with  respect  to circulating  an                                                               
opinion. His  experience is that  administrative appeals  tend to                                                               
get  through superior  court  within  two years,  but  it can  be                                                               
faster than  that if the  parties request expedited  review. Once                                                               
it gets to  the supreme court there's already  a record developed                                                               
and there's a  decision so the court just gives  it a fresh look.                                                               
He reiterated, "When we've looked at  this issue in the past with                                                               
respect to  litigation, we haven't  seen a  significant advantage                                                               
that  wouldn't  be  gained  by asking  the  court  for  expedited                                                               
review."                                                                                                                        
                                                                                                                                
SENATOR  WIELECHOWSKI  noted  that  in  redistricting  cases  and                                                               
campaign related cases the supreme  court issues decisions within                                                               
days. "I  realize this is  more complex, but  I kind of  like the                                                               
idea of the supreme court  as original action." The supreme court                                                               
could probably handle  an appeal in a few months  in the same way                                                               
that the complex redistricting cases are done.                                                                                  
                                                                                                                                
MR. OSTROVSKY said  in election matters there's  a 10-day statute                                                               
for bringing  an appeal  after a decision.  Court Rule  90.8 says                                                               
that the matter  will be given priority over  other court matters                                                               
and the legislature  might consider that. he noted  that it takes                                                               
a two-thirds vote of the legislature to amend court rules.                                                                      
                                                                                                                                
CHAIR FRENCH said we'll see if  we can get the two-thirds support                                                               
for identifying  AGIA related claims  as priority. He  then asked                                                               
if the only  instance under which the  administrative record gets                                                               
a  full review  is when  no license  has been  issued. "It's  the                                                               
190(c) route."                                                                                                                  
                                                                                                                                
MS. HARRIS said  yes; when no license has been  issued the matter                                                               
goes  from  the  administration   to  court  without  legislative                                                               
involvement.                                                                                                                    
                                                                                                                                
CHAIR FRENCH  commented that that  is where  there can be  a two-                                                               
year review of the administrative record.                                                                                       
                                                                                                                                
MR. OSTROVSKY agreed.                                                                                                           
                                                                                                                                
CHAIR FRENCH said in that instance  the reality is that we're not                                                               
standing in the  way of a project; we're checking  to see that we                                                               
didn't miss a good opportunity.                                                                                                 
                                                                                                                                
MS. OSTROVSKY agreed.                                                                                                           
                                                                                                                                
CHAIR FRENCH observed that that  leads into the next topic, which                                                               
is the  point at which a  legal challenge can be  brought. Noting                                                               
that the  bill repeatedly references  determinations made  by the                                                               
commissioners,  he asked  if there's  any  legal significance  to                                                               
"determination."                                                                                                                
                                                                                                                                
MR.  OSTROVSKY explained  that the  significant language  is that                                                               
the commissioners'  determination becomes  a final  agency action                                                               
for appeal purposes.                                                                                                            
                                                                                                                                
CHAIR FRENCH asked if a determination is challengeable.                                                                         
                                                                                                                                
MR. OSTROVSKY said yes.                                                                                                         
                                                                                                                                
MS. HARRIS elaborated that under  DNR and DOR regulations a party                                                               
that doesn't  like a decision  or determination generally  has an                                                               
administrative   avenue  of   appeal   until   there's  a   final                                                               
determination  on the  issue. She  cautioned that  she'd need  to                                                               
review  the bill  to check  the context  in which  it's currently                                                               
used.                                                                                                                           
                                                                                                                                
CHAIR FRENCH  referenced Section  43.90.150 on  page 9,  lines 26                                                               
and  27 and  said that  seems  to be  the first  place where  the                                                               
commissioners make  a determination.  You're saying a  person can                                                               
only  appeal  that  determination administratively  and  ask  for                                                               
reconsideration. O  they could do  the smart thing and  fix their                                                               
application.  In either  event they  can't get  to court  on that                                                               
decision.                                                                                                                       
                                                                                                                                
MR.  OSTROVSKY   agreed  because  there  isn't   a  final  agency                                                               
determination. Generally  the courts  won't consider  things when                                                               
they're going through the administrative process.                                                                               
                                                                                                                                
CHAIR  FRENCH said  that holds  true for  all the  determinations                                                               
down   to    the   final   agency   determination    in   Section                                                               
43.90.190(a)(1).                                                                                                                
                                                                                                                                
MR.   OSTROVSKY  added   that   at  that   point  someone   would                                                               
appropriately come in  and say that the process  was flawed along                                                               
the way.                                                                                                                        
                                                                                                                                
SENATOR  WIELECHOWSKI   questioned  whether  it  isn't   a  final                                                               
determination for  a party that  submits an application  which is                                                               
deemed inadequate.  But it  isn't a  final determination  for the                                                               
state or the other parties.                                                                                                     
                                                                                                                                
MS. HARRIS said it's an issue that  could come up and there is an                                                               
argument that  it's a final  determination in  Section 43.90.150.                                                               
The person could appeal to the  agency for review and after going                                                               
through  the agency  level  reviews, they  could  take the  final                                                               
agency  action   on  the  question   of  whether  or   not  their                                                               
application was complete to court.  She added that it is possible                                                               
for  the commissioners  jointly  to have  authority  and to  have                                                               
regulations  to determine  what  will  and will  not  be a  final                                                               
agency  action.  The  idea  isn't  to  limit  anyone's  right  to                                                               
administrative  or  judicial  recourse;  rather the  idea  is  to                                                               
funnel it  into a more administratively  efficient channel saying                                                               
that at  a certain  point it  will be a  final agency  action and                                                               
then you  may take it on  to court. She's familiar  with some tax                                                               
regulations in DOR that are like that.                                                                                          
                                                                                                                                
CHAIR FRENCH  said for  the record,  are we  back to  where we're                                                               
equivocating  a bit?  He thought  it  was clear  that a  rejected                                                               
applicant   wasn't  going   to  get   a  court   review  of   the                                                               
commissioners' decision. Is that not correct?                                                                                   
                                                                                                                                
MS.  HARRIS responded  there  are  two lawyers  and  you got  two                                                               
answers,  but  they  aren't completely  inconsistent  because  it                                                               
isn't absolutely  clear-although to Mr. Ostrovsky  it is clearer.                                                               
There are arguments  that you have to wait until  there's a final                                                               
agency   action  as   provided  under   Sections  43.90.190   and                                                               
43.90.200, she stated.                                                                                                          
                                                                                                                                
CHAIR FRENCH imagined a rejected  applicant saying that their due                                                               
process rights  have been trampled  and that they want  their day                                                               
in court.  Their argument would  be that  they didn't get  a full                                                               
and  complete hearing  on whether  or not  their application  was                                                               
incomplete  or that  it  didn't  meet the  terms.  He asked  what                                                               
happens in that event.                                                                                                          
                                                                                                                                
MR.  OSTROVSKY said  he believes  that DOL  would argue  that the                                                               
statute   looks   at  two   possibilities.   One   is  that   the                                                               
commissioners reject all applications and  that is a final agency                                                               
decision. Or the commissioners accept  an application and it goes                                                               
through legislative  approval. At that time  someone who believes                                                               
that  they have  been  denied due  process  can challenge  either                                                               
decision saying  there were procedural irregularities.  The court                                                               
would  remand  it  back  to  the agency  at  the  time  that  the                                                               
application  was filed  on the  issue of  completeness. Generally                                                               
courts want  agencies to complete their  decision making process,                                                               
he said.                                                                                                                        
                                                                                                                                
4:19:47 PM                                                                                                                    
MS.  DAVIS advised  that the  current House  committee substitute                                                               
incorporated a  provision in  the application  requirements which                                                               
says the  applicant shall, "waive  the right to appeal  the award                                                               
to another  applicant or the determination  under AS 43.90.180(b)                                                               
that no application merits the  issuance of a license." She noted                                                               
that 43.90.180(b) is  the determination to issue a  license to no                                                               
one. The  idea is to cut  off the avenue for  appeals for someone                                                               
who is  aggrieved by not  having their application  selected. She                                                               
said  she would  defer to  the attorney  general's group,  but it                                                               
would remove some of the administrative hassle.                                                                                 
                                                                                                                                
SENATOR  THERRIAULT advised  that Senator  Wagoner has  developed                                                               
language to that effect.                                                                                                        
                                                                                                                                
SENATOR WIELECHOWSKI  said he  likes the  idea and  believes it's                                                               
worth  discussion.  He  asked  Ms. Harris  for  her  thoughts  on                                                               
legally  prohibiting a  person from  bringing a  lawsuit if  they                                                               
feel they've been discriminated against.                                                                                        
                                                                                                                                
MS.  HARRIS  said  she  believes it's  possible  to  structure  a                                                               
provision that  wouldn't be discriminatory to  designate when the                                                               
actions  are final.  It would  say something  such as  "no action                                                               
taken under  this chapter is  a final agency action  until…" Then                                                               
move it into Section 43.90.190  or Section 43.90.200 whenever you                                                               
think  it's appropriate  for  the  claims to  be  brought on  any                                                               
action that goes on during the application process, she said.                                                                   
                                                                                                                                
4:22:08 PM                                                                                                                    
SENATOR  HUGGINS advised  that Senator  Wagoner didn't  offer the                                                               
amendment because he didn't know  whether it would meet the legal                                                               
test.                                                                                                                           
                                                                                                                                
MR. OSTROVSKY  explained that  the state  as a  sovereign decides                                                               
when where and how  it can be sued so this  would be the exercise                                                               
of that  power. The  state would  be restricting  a participant's                                                               
ability to sue and the issue this raises is due process.                                                                        
                                                                                                                                
CHAIR FRENCH  stated that the  focus is on Section  43.90.190 and                                                               
he believes  that legislative  approval and  the issuance  of the                                                               
license is the meat and  potatoes of the decision making process.                                                               
He noted that on page 13, lines  2 and 3, there is reference to a                                                               
final agency action and on lines  13 and 14 there is reference to                                                               
a final administrative action. It  strikes him that the two words                                                               
should be same, and he asked which one he would pick.                                                                           
                                                                                                                                
MR. OSTROVSKY  said he  believes final agency  action is  the way                                                             
it's usually described in statute.                                                                                              
                                                                                                                                
CHAIR FRENCH  said he'd put  it in  the amendment file  to change                                                               
the word "administrative" on page 13, line 13, to "agency."                                                                     
                                                                                                                                
MR. OSTROVSKY said he'd double check after the meeting                                                                          
                                                                                                                                
CHAIR FRENCH  asked what would  be included in  the determination                                                               
of who gets the license.                                                                                                        
                                                                                                                                
MR. OSTROVSKY  said he expects  it would  be analogous to  a best                                                               
interest  finding where  the commissioners  would describe  their                                                               
review of  the applications. They'd  go through the  criteria and                                                               
give a lengthy  discussion of their rationale  for the decisions.                                                               
He added  that agency decisions  have to be reviewable  by courts                                                               
meaning that courts  have to understand the  reasoning behind the                                                               
decisions.                                                                                                                      
                                                                                                                                
CHAIR FRENCH  asked if  the standard of  review for  the decision                                                               
would be the reasonable basis test.                                                                                             
                                                                                                                                
MR.  OSTROVSKY said  he believes  so because  this is  a question                                                               
that involves agency expertise as  a mixed question of policy and                                                               
reason.                                                                                                                         
                                                                                                                                
CHAIR  FRENCH said  the superior  court would  ask itself  if the                                                               
commissioners had a reasonable basis  for awarding the license to                                                               
the particular successful applicant.                                                                                            
                                                                                                                                
MR. OSTROVSKY said he believes that would be the standard.                                                                      
                                                                                                                                
CHAIR FRENCH said once the decision  is made to award the license                                                               
the process comes to the legislature  in the form of a resolution                                                               
or a bill  asking it to ratify the  commissioners' decision. Then                                                               
the question  is what an  aggrieved party can really  attack once                                                               
the legislature has passed a bill ratifying the license.                                                                        
                                                                                                                                
MR. OSTROVSKY  opined that if  the bill remains  with legislative                                                               
approval  the  likely  challenge  would be  on  a  constitutional                                                               
basis. There  wouldn't be  much point  in challenging  the agency                                                               
determination because the findings  of the commissioners would be                                                               
less relevant due to the subsequent legislative process.                                                                        
                                                                                                                                
CHAIR  FRENCH summarized  that the  unsuccessful applicant  loses                                                               
the ability  to challenge  the decision  of the  commissioners as                                                               
having no  rational basis because the  legislature has superseded                                                               
its judgment in place of the judgment of the commissioners.                                                                     
                                                                                                                                
MR. OSTROVSKY said that is his opinion.                                                                                         
                                                                                                                                
4:28:11 PM                                                                                                                    
SENATOR  THERRIAULT  said  he'd   like  some  discussion  on  the                                                               
legislature  interjecting  itself  into   what  is  generally  an                                                               
executive function.  He questioned  the advisability  of stepping                                                               
back into  that unknown. The administration  must have considered                                                               
that  in the  original bill  and the  Chair just  brought up  the                                                               
question of whether the commissioners'  decision is superseded by                                                               
the legislature  by passing a bill.  He noted that the  AGIA bill                                                               
calls for  a resolution  and not  a bill. He  asked if  there's a                                                               
difference between a bill and a resolution.                                                                                     
                                                                                                                                
CHAIR FRENCH  replied the short  answer is yes and  the committee                                                               
would discuss that in the future.                                                                                               
                                                                                                                                
SENATOR THERRIAULT  reminded the committee  of the solid  week of                                                               
discussion  from  last year  about  whether  the legislature  can                                                               
demand ratification.                                                                                                            
                                                                                                                                
MR. OSTROVSKY  commented that  he agrees  with the  statement Mr.                                                               
Bullock  made  yesterday  that there  are  separation  of  powers                                                               
issues  related to  the legislature  essentially doing  executive                                                               
branch functions  such as entering  into or  approving contracts.                                                               
This situation  is somewhat analogous  to the  1998 consideration                                                               
of the  Stranded Gas  Act because it  too called  for legislative                                                               
approval. And  so the attorney  general did an opinion,  he said.                                                               
In both bills the separation of  powers issue is a little unclear                                                               
because to some degree they both  involve the taxing power of the                                                               
state, which is a legislative  function. The separation of powers                                                               
issue  has come  up a  number of  times before  and the  way it's                                                               
generally  been resolved  in  Alaska is  though  the doctrine  of                                                               
comity. That is  the governor has agreed, as a  matter of comity,                                                               
to  the legislative  action.  The  AGIA bill  is  a similar  case                                                               
because the governor introduced a  bill that initially called for                                                               
legislative disapproval.  "So I think  as a matter of  comity the                                                               
governor has acceded to a legislative role in here."                                                                            
                                                                                                                                
MR. OSTROVSKY summarized that he  believes there is an underlying                                                               
separation of  powers issue  related to the  AGIA bill,  but that                                                               
issue will  always be there  if the  legislature wants to  take a                                                               
role in  what is  arguably an executive  branch function.  In the                                                               
past it's been  resolved with the executive  branch recognizing a                                                               
colorable  claim  of  separation  of powers  but  agreeing  to  a                                                               
legislative  role  as  a  matter   of  comity.  "I  think  that's                                                               
reflected in the bill," he stated.                                                                                              
                                                                                                                                
SENATOR  THERRIAULT   noted  that   the  Stranded  Gas   Act  was                                                               
problematic in that  it spanned many governors and  asked if this                                                               
"agreement" would survive the next administration.                                                                              
                                                                                                                                
MR. OSTROVSKY said no, it's  particular to an individual governor                                                               
to say  that or  not. If  this isn't  a license  in four  or five                                                               
years  another governor  could say  that the  legislature has  no                                                               
role. This governor  has not expressed intent to do  that in this                                                               
bill, he said.                                                                                                                  
                                                                                                                                
4:32:35 PM                                                                                                                    
CHAIR  FRENCH said  his  perspective  is that  it's  a  bit of  a                                                               
tradeoff  or  political  bargain  between  the  two  branches  of                                                               
government. The  governor is  giving the  legislature a  grant of                                                               
authority because  that was the  pattern of the Stranded  Gas Act                                                               
and  the  legislature  is  happy  to  have  the  ability  to  not                                                               
disapprove  or  to approve  the  applicant  before granting  this                                                               
enormous contract  that deals  with a huge  piece of  the state's                                                               
resources.                                                                                                                      
                                                                                                                                
MR. OSTROVSKY  said he  wants to clarify  that the  separation of                                                               
powers issue  is always out there  but it is not  clear that this                                                               
bill is a  violation of that. The attorney general  looked at the                                                               
Stranded Gas  Act because it  involved the state's  fiscal system                                                               
and that's a  legislative branch function. One way to  look at it                                                               
is that  the legislature gave away  part of its authority  to the                                                               
executive   subject   to   legislative  approval.   Clearly   the                                                               
separation  of powers  issue is  always  out there  but it  isn't                                                               
clear that this violates it.                                                                                                    
                                                                                                                                
SENATOR  THERRIAULT  reminded members  that  last  fall when  the                                                               
legislature  sued the  governor to  prevent him  from potentially                                                               
signing  a contract  it argued  that  to the  court. Because  the                                                               
legislature sort  of loaned  out its power  it would  most likely                                                               
prevail.  The superior  court  judge agreed  and  ruled that  the                                                               
governor was barred  from signing a contract. He  isn't sure that                                                               
AGIA is the  same because the legislature is  passing judgment on                                                               
what it  is willing to  do with  the taxing authority  right now.                                                               
We're not  loaning our  authority out  saying negotiate  and then                                                               
we'll ratify it after the fact.                                                                                                 
                                                                                                                                
MR. OSTROVSKY agreed that the facts are different here.                                                                         
                                                                                                                                
CHAIR  FRENCH said  it's worth  pointing out  that three  or four                                                               
days  was spent  on  the issue  last year  in  part because  many                                                               
citizens were concerned  about their ability to  study the record                                                               
upon  which the  commissioners would  make a  decision. He  noted                                                               
that the  Stranded Gas Act  called for  a high degree  of secrecy                                                               
and  AGIA  takes   a  different  approach.  AGIA   says  that  an                                                               
applicant's  record is  open for  public inspection  the day  the                                                               
application  is put  forward  unless it's  a  trade secret.  That                                                               
would  be addressed  subsequently under  a different  subject, he                                                               
said.                                                                                                                           
                                                                                                                                
CHAIR FRENCH  stressed that the  committee must  acknowledge that                                                               
the  applicants  surrender a  significant  of  their due  process                                                               
rights through  the legislature inserting  itself to  approve the                                                               
license. He continued to say that:                                                                                              
                                                                                                                                
     The fact is if an  unsuccessful applicant who's unhappy                                                                    
     with the decision of the  commissioners can only attack                                                                    
     that  decision…during that  60-day legislative  process                                                                    
     when  we're  about to  grant  the  license to  somebody                                                                    
     else,  that's their  opportunity…to have  their day  in                                                                    
     court.  They…come  here  and make  the  case  that  the                                                                    
     commissioners  made a  bad decision…that  they're going                                                                    
     in the  wrong direction…that  something has to  be done                                                                    
     before we  go down the  wrong track. That's  in essence                                                                    
     their trial.  Just as  much as  it's an  affirmation of                                                                    
     the  decision made  by the  commissioners to  grant the                                                                    
     license  in  this   direction,  it's  the  unsuccessful                                                                    
     applicants  opportunity to  have  their hearing…on  the                                                                    
     nature of their grievance. That's the way I read it.                                                                       
                                                                                                                                
SENATOR   THERRIAULT   requested   some  discussion   about   the                                                               
difference between a resolution and a bill.                                                                                     
                                                                                                                                
MR. OSTROVSKY said his understanding  of the difference is that a                                                               
resolution  has to  do with  the sense  of the  body and  conduct                                                               
within the  body and  a bill  has external  affects. A  bill sets                                                               
obligations  and rights  of parties  outside.  Under the  current                                                               
committee substitute  there is approval  by resolution. In  a way                                                               
it turns  a resolution into a  bill because it has  an affect. He                                                               
didn't know  if that's  a problem.  He believes  they effectively                                                               
become  the same  but  he  would suggest  the  committee ask  the                                                               
legislative drafters.                                                                                                           
                                                                                                                                
4:38:02 PM                                                                                                                    
SENATOR McGUIRE  said in this  instance the governor  clearly has                                                               
approved a  project through the  commissioners so  the meaningful                                                               
affect  would  only  be  there  if a  governor  had  a  different                                                               
viewpoint. In  this case  a resolution and  a statute  would have                                                               
similar affects, she stated.                                                                                                    
                                                                                                                                
MR. OSTROVSKY added particularly if there's the issue of comity.                                                                
                                                                                                                                
CHAIR  FRENCH stated  his belief  that  Mr. Bullock  will say  it                                                               
makes a big  difference and that it should be  a bill rather than                                                               
a  resolution. "I  guess I'm  not hearing  any fierce  opposition                                                               
from the Department of Law with respect to that point," he said.                                                                
                                                                                                                                
SENATOR  WIELECHOWSKI expressed  the view  that it  makes a  huge                                                               
difference for two  reasons. First, Article IX,  Section 4, talks                                                               
about exemptions  of a different  kind granted by general  law so                                                               
it  is helpful  in terms  of the  surrender clause  and taxation.                                                               
Second,  it  helps  in  terms of  appeal  rights.  As  previously                                                               
mentioned the rights of appeal  are lower when it's a legislative                                                               
decision as opposed to an agency decision.                                                                                      
                                                                                                                                
MR. OSTROVSKY said that might be  correct, but he would point out                                                               
that the legislature is considering the bill right now.                                                                         
                                                                                                                                
SENATOR McGUIRE  said she  wants to hear  the legal  arguments in                                                               
this  committee  but  she  also   thinks  it's  important  to  be                                                               
practical.  In   that  regard  she  noted   that  sometimes  it's                                                               
difficult  to get  61 people  to  make a  decision on  something.                                                               
Senator Wielechowski's  argument is good  but she'd like  to hear                                                               
some practical  parts interjected. The idea  is to end up  with a                                                               
gas line contract  but at the same time ensure:  that the process                                                               
tracks the  constitution; that it's done  appropriately; and that                                                               
the  rights  of appeal  are  reserved.  There's a  balance  there                                                               
somewhere, she said.                                                                                                            
                                                                                                                                
CHAIR FRENCH said  he's had the same thought.  "There's a tipping                                                               
point in there between what's  constitutional and what gets a gas                                                               
line and…it's worthy of keeping in mind."                                                                                       
                                                                                                                                
CHAIR FRENCH  asked if there  are more questions about  the point                                                               
at which a legal challenge can be brought.                                                                                      
                                                                                                                                
SENATOR  WIELECHOWSKI  stated  that  this is  a  very  worthwhile                                                               
discussion  to have  because the  issue is  to protect  the state                                                               
from being stuck in litigation for years to come.                                                                               
                                                                                                                                
CHAIR FRENCH suggested  the committee spend a bit of  time on the                                                               
legislative  role in  approving the  license versus  disapproving                                                               
the decision to  issue a license. He asked Mr.  Ostrovsky to give                                                               
his view of whether there is a difference and if so, what it is.                                                                
                                                                                                                                
MR.  OSTROVSKY  said the  original  bill  called for  legislative                                                               
disapproval  in part  to give  people the  right to  challenge in                                                               
court the  administrative record. Any  challenge would be  on the                                                               
commissioners' decision  and if  the legislature  had disapproved                                                               
the decision  there wouldn't be  anything to challenge,  he said.                                                               
By changing  it to approval  the legislature inserted  itself and                                                               
that  probably takes  out the  opportunity for  an administrative                                                               
challenge.  Essentially  the  legislature becomes  the  citizens'                                                               
input in lieu of the court.                                                                                                     
                                                                                                                                
CHAIR FRENCH  questioned what the  administration had in  mind to                                                               
present to the legislature in terms  of a resolution or bill when                                                               
it initially proposed the AGIA bill.                                                                                            
                                                                                                                                
MR.  OSTROVSKY  explained that  under  Section  43.90.200 of  the                                                               
original  bill the  commissioners  were to  forward  a notice  of                                                               
intent to issue a license.                                                                                                      
                                                                                                                                
MS. HARRIS  added that the  commissioners were to  forward letter                                                               
of intent  to issue  the license  and the  finding that  had been                                                               
made public. She didn't know  what the document itself would have                                                               
looked like,  but it would  probably have  been an advice  to the                                                               
legislature.   The   legislature   could  take   action   if   it                                                               
disapproved.                                                                                                                    
                                                                                                                                
CHAIR FRENCH referenced page 10  of the original bill, which says                                                               
that  unless  the  notice  of  intent  is  disapproved  by  joint                                                               
resolution  the  license  would   go  into  effect.  Suppose  the                                                               
legislature  considered the  commissioners' decision  for 30-days                                                               
and then went home without  disapproving it and without passing a                                                               
joint resolution. He questioned what  the state would have argued                                                               
in court if an unsuccessful applicant  asked for a full rehash of                                                               
the agency decision  in superior court, looking  at every finding                                                               
to see if  it had a reasonable basis. Would  the state argue that                                                               
by not disapproving it, the  legislature was in essence approving                                                               
it  or would  the state  waive that  argument and  let that  long                                                               
process take place?                                                                                                             
                                                                                                                                
MR. OSTROVSKY said he doesn't  believe the state would waive that                                                               
right, but he  does think that under this statute  it was a final                                                               
agency  action that  is subject  to appeal.  You can't  read much                                                               
into  the legislature's  approval or  disapproval; you'd  have to                                                               
review  the  agency record  and  see  if  the decision  was  made                                                               
correctly.                                                                                                                      
                                                                                                                                
CHAIR  FRENCH  summarized  saying  you  believe  that  there's  a                                                               
greater likelihood of a full  reasonable basis examination of the                                                               
commissioners'  decision  under  the  disapproval  scenario  than                                                               
under the approval  scenario. Under approval it's  clear that the                                                               
challenge is wiped out, but  it may survive under the disapproval                                                               
scenario.                                                                                                                       
                                                                                                                                
MR. OSTROVSKY  clarified that he  believes it does  survive under                                                               
the disapproval scenario.                                                                                                       
                                                                                                                                
SENATOR  WIELECHOWSKI said  that goes  back  to the  issue of  it                                                               
being  a resolution  or  a bill.  As a  resolution  it's a  final                                                               
agency determination and the losing party  has the right to go to                                                               
court. If it's  a bill that right does not  exist. The only right                                                               
at that point  is to attack the constitutionality.  "That's why I                                                               
think it's critical that we figure out  a way to make this into a                                                               
bill instead of a resolution," he stated.                                                                                       
                                                                                                                                
CHAIR FRENCH asked if there is more discussion on this point.                                                                   
                                                                                                                                
4:47:46 PM                                                                                                                    
SENATOR THERRIAULT mentioned  the House language that  cuts out a                                                               
disgruntled applicant  and questioned  whether they would  be the                                                               
only potential challengers of an agency determination.                                                                          
                                                                                                                                
CHAIR  FRENCH said  not  necessarily, but  it's  hard to  imagine                                                               
other  entities  that  would  have  the  financial  interest  and                                                               
wherewithal to  bring a  challenge. But  there could  be citizens                                                               
that are aggrieved by the decision and want a review, he said.                                                                  
                                                                                                                                
SENATOR  THERRIAULT wondered  if the  House language  really cuts                                                               
that out because they've waived that right.                                                                                     
                                                                                                                                
CHAIR FRENCH  said in this  case it  wouldn't be an  applicant. A                                                               
more efficient  way to  address it  might be to  box out  all the                                                               
commercial  players from  attacking one  another subsequent  to a                                                               
commissioners'  decision. But  it's not  possible to  ever really                                                               
get  away  from  the  disgruntled  citizen  who  doesn't  like  a                                                               
particular company, he said.                                                                                                    
                                                                                                                                
MR. OSTROVSKY advised  that Mr. Bullock made the  House version a                                                               
bill rather than a resolution.                                                                                                  
                                                                                                                                
CHAIR FRENCH  announced that the  committee would  look carefully                                                               
at the  work from  the other body  and take it  up as  a possible                                                               
amendment at the appropriate time in the proceedings.                                                                           
                                                                                                                              
SENATOR  McGUIRE  asked  for additional  discussion  on  approval                                                               
versus  disapproval  because  she  believes it  might  have  been                                                               
better  as originally  drafted.  She reiterated  that getting  60                                                               
people to  move in one  direction is  very difficult and  she's a                                                               
bit worried about the legislature supplanting the court process.                                                                
                                                                                                                                
MR. OSTROVSKY  stated that disapproval  was in the  original bill                                                               
in  part  for a  clean  administrative  decision. It's  really  a                                                               
policy  call  for a  fulsome  avenue  for  judicial appeal  or  a                                                               
political avenue with legislative approval.                                                                                     
                                                                                                                                
4:51:51 PM                                                                                                                    
SENATOR  WIELECHOWSKI  opined that  it's  a  balancing test:  the                                                               
original  bill had  legislative disapproval;  if the  legislature                                                               
takes  no  action  then  the  decision  to  issue  a  license  is                                                               
automatically  approved; if  the legislature  takes no  action it                                                               
gives  up the  right  to potentially  head  off numerous  lengthy                                                               
appeals;  if  the  legislature  is   to  approve  there  will  be                                                               
tremendous pressure  on all  sides for some  sort of  action; the                                                               
risk of delay  translates to billions of dollars  every year. "So                                                               
it is a balancing test in my opinion," he stated.                                                                               
                                                                                                                                
MR. OSTROVSKY  explained that the  original bill  had disapproval                                                               
in part  because of the  administrative record, but  also because                                                               
the administration believes that it  makes for a quicker process.                                                               
The commissioners  make a determination  and the  legislature has                                                               
the ability to act on it.  That moves the process forward quickly                                                               
and  gives citizens  the  right to  challenge  the decision.  The                                                               
administration has  full confidence  that the  commissioners will                                                               
make a good decision and with a very defensible record.                                                                         
                                                                                                                                
SENATOR McGUIRE  said she  still isn't  pleased with  the change.                                                               
Stating that  she trusts this  administration, she  described the                                                               
AGIA process as more transparent  than the previous process. Also                                                               
it provides an opportunity to evaluate  and it has a track record                                                               
for appeals and process that's  clear. Thus she's concerned about                                                               
adding 30  days and  interjecting a political  body into  such an                                                               
important process. My goal is  similar to Senator Wielechowski's,                                                               
she said, but my approach is the opposite.                                                                                      
                                                                                                                                
MR. OSTROVSKY  pointed out  that picking  an applicant  is really                                                               
more an  executive function  while a  piece of  legislation gives                                                               
the  executive branch  direction on  how to  do something.  Doing                                                               
that thing is what the  executive branch does, so the legislature                                                               
will have a different kind  of debate under the approval scenario                                                               
because it will  have to do with picking  a particular applicant.                                                               
"That's another reason that we  felt that this…feels like more an                                                               
executive branch function and ought to  be subject to the type of                                                               
review executive branch functions are subject to," he stated.                                                                   
                                                                                                                                
SENATOR THERRIAULT said  he agrees, which gets back  to the issue                                                               
of the  legislative interjecting  itself. Under the  Stranded Gas                                                               
Act the  legislature was  loaning its power,  but that's  not the                                                               
case  here.  "Personally,  I  wouldn't  require  any  legislative                                                               
involvement," he  stated. The legislature  could dictate  what it                                                               
wants in the law and the  executive could carry out its executive                                                               
function.                                                                                                                       
                                                                                                                                
4:56:15 PM                                                                                                                    
CHAIR FRENCH  suggested the committee reserve  judgment until the                                                               
public  and  interested  parties  have  had  the  opportunity  to                                                               
express their view on the matter.                                                                                               
                                                                                                                                
CHAIR FRENCH recessed the meeting at 4:56:41 PM.                                                                              
                                                                                                                                
CHAIR  FRENCH reconvened  the meeting  at 5:40:36  PM and  opened                                                             
public testimony on SB 104. He  advised that each person would be                                                               
given  about  five  minutes  to  state  their  general  concerns.                                                               
Supplementary information could be sent  to his office in written                                                               
form and it would become part of the record.                                                                                    
                                                                                                                                
PAUL  KENDALL,  Anchorage  resident,   said  the  legislature  is                                                               
defining the way  Alaska determines value and  manages its assets                                                               
in an open and public manner.  He sees a gathering of elected men                                                               
and women with respect for differences  to discover a way to make                                                               
a  better life  for our  children. He  said he's  still concerned                                                               
about not seeing the faces  of the testifiers. This large bet-on-                                                               
the-come gas pipeline undertaking is  insignificant to him but it                                                               
is not  inconsequential. The  consequences will  be huge  for the                                                               
Alaskan  people. If  indeed the  time has  come he  believes that                                                               
Alaska will have the Alaska  sovereign line, the Canadian Highway                                                               
line, and  a hydrogen fuel-based  economy. If he's  right, Alaska                                                               
may be the  place where mankind breaches a new  society. Some may                                                               
find that statement  suspect, but all things have a  time to come                                                               
and Alaska  has paid heavily.  He thanks the governor,  her team,                                                               
and the  elected officials  who mean  to do  the right  thing. To                                                               
this point  the accomplishments  have been admirable.  The Alaska                                                               
gas pipeline  day of reckoning is  close at hand and  on that day                                                               
everyone will  see the true  intentions of all parties  that have                                                               
come to  share the spoils. He  said he'd like to  see two things:                                                               
1) a review of  the volumetric space in the pipe  sphere and 2) a                                                               
review of the projected $3 mcf  at the wellhead for the consumer.                                                               
In conclusion he asked the  committee to please not underestimate                                                               
the applications of hydrogen gas fuel because its time has come.                                                                
                                                                                                                                
5:46:44 PM                                                                                                                    
PAUL LAIRD,  General Manager,  Alaska Support  Industry Alliance,                                                               
said this 400 member company  generates more than 30,000 jobs for                                                               
Alaskans. The  alliance believes that  if Alaska wants  the North                                                               
Slope producers  to make firm  commitments, then  upstream fiscal                                                               
issues need to be resolved first.  AGIA puts too much emphasis on                                                               
mitigating the  short-term financial  risks of  pipeline builders                                                               
and not enough to address the  longer term risks of the shippers.                                                               
He  can't  tell what  fixes  are  needed to  provide  prospective                                                               
shippers  with fiscal  confidence to  make commitments  exceeding                                                               
$100 billion over  the next 30 years, while  still complying with                                                               
Alaska's constitution.  He urged the committee  to determine what                                                               
terms  aren't  constitutional  and  find  a  mutually  beneficial                                                               
solution that is.  The alliance urges the legislature  to craft a                                                               
bill that acknowledges the interests  of Alaskans, the developer,                                                               
the transporter, and North Slope producers and shippers.                                                                        
                                                                                                                                
5:48:39 PM                                                                                                                    
JERRY McCUTCHEN,  Anchorage resident,  articulated the  view that                                                               
Econ One's  work is  garbage and the  legislature should  get its                                                               
money  back.  Also  he  was   not  impressed  with  MidAmerican's                                                               
statement that  the 35 tcf would  last for 22 years.  The state's                                                               
estimate that the decline would begin  in about 13 years is about                                                               
right. You're  really suffering  from lack of  gas, he  said. You                                                               
need 60  tcf and you've only  got 29 tcf according  to Alaska Oil                                                               
and  Gas  Conservation  Commission.(AOGCC). Now  Pt.  Thomson  is                                                               
missing so  now you  have a  third of  the necessary  gas. You're                                                               
banking on  the governor giving  Pt. Thomson back, but  its value                                                               
isn't  what it  was  30 years  ago as  unexplored  land. Now  the                                                               
market value  is $70 billion. Can  the state afford to  give that                                                               
asset  back and  how long  is the  litigation going  to last?  He                                                               
believes  it  will  last  the  entire  Palin  administration.  He                                                               
questioned how  it's possible  to design a  gas line  without Pt.                                                               
Thomson.                                                                                                                        
                                                                                                                                
5:51:42 PM technical difficulties.                                                                                            
                                                                                                                                
MERRICK PIERCE, North Pole resident,  said he is pleased there is                                                               
not exclusionary  language in AGIA  that would  limit competition                                                               
among  licensed applicants.  He advised  that he  would focus  on                                                               
"Section 43.90.180-Application evaluation  and ranking." There is                                                               
a lot of good criteria  including subsection (b)(1) regarding how                                                               
quickly the  applicant proposes to commence.  He suggested adding                                                               
language  to paragraph  (5). After  "state."  Replace the  period                                                               
with a comma and insert:  "and factors found by the commissioners                                                               
to improve  the health, safety,  and welfare of  Alaskans." There                                                               
are some entities that will  build the project sooner rather than                                                               
later  and  a  project  built sooner  would  have  very  positive                                                               
impacts on the  Fairbanks area. When Tom Irwin  worked for Golden                                                               
Valley Electric  Association, he worked with  an energy taskforce                                                               
on  energy matters  for the  Interior. The  taskforce found  that                                                               
this  area of  only 82,000  people pays  about $50  million every                                                               
year  for  petroleum for  electric  generation  and another  $130                                                               
million  for  petroleum  to  heat   homes  and  businesses.  This                                                               
staggering outlay  of money will be  reduced when there is  a gas                                                               
pipeline, he said. Also, his  community has four coal-fired power                                                               
plants  for   electric  generation  and  steam   heat  that  emit                                                               
contaminants like lead, mercury  and radio active material. Those                                                               
emissions  are  obviously  toxic.  The  Environmental  Protection                                                               
Association  (EPA) has  established that  there is  no safe  lead                                                               
exposure level  for children. Also,  high doses of  mercury cause                                                               
mental  retardation and  neurological  disorders  in infants.  He                                                               
encouraged  members to  look at  the  EPA publication,  America's                                                               
Children and the Environment. He  said another concern is cancer.                                                               
The typical  coal-fired power plant  emits more radiation  than a                                                               
nuclear power plant. That's  because strontium, thorium, uranium,                                                               
and  plutonium  and  trace  amounts   of  all  their  radioactive                                                               
isotopes are found in coal. He  noted that uranium level in Healy                                                               
coal is about 1 ppm  and those radioactive isotopes contribute to                                                               
lung cancer.  In Fairbanks the lung  cancer rate is about  25 per                                                               
100,000 people so  years of delay means more  people in Fairbanks                                                               
will die  of lung  cancer and leukemia,  more children  will have                                                               
lower IQs  due to lead  exposure, and  more infants will  be born                                                               
mentally retarded as a result  of mercury exposure. In conclusion                                                               
he said  there's more riding on  this gas pipeline than  just the                                                               
tremendous  economic benefits;  there's a  lot riding  on getting                                                               
the air cleaned up in the  Fairbanks area. He urged the committee                                                               
to  include language  that allows  the commissioners  to consider                                                               
the health,  safety, and welfare  of Alaskans when  they evaluate                                                               
the different applications.                                                                                                     
                                                                                                                                
5:57:58 PM                                                                                                                    
SENATOR THERRIAULT asked him to restate the suggested language.                                                                 
                                                                                                                                
MR. PIERCE restated the following:  On page 11, line 25 following                                                               
"state." replace the period with  a comma and insert "and factors                                                               
found by  the commissioners  to improve  the health,  safety, and                                                               
welfare of Alaskans."                                                                                                           
                                                                                                                                
CHAIR FRENCH said he too made note of the language.                                                                             
                                                                                                                                
JOEY MERRICK, Business Manager,  Alaska Laborers Local 341, Eagle                                                               
River,  said  this  union, representing  over  2,100  members  in                                                               
Southcentral, supports the gasline  project because it's vital to                                                               
Alaska's  future.  There  are  many  aspects  to  AGIA,  but  the                                                               
laborers union  and its members  believe that the  most important                                                               
issue  is  a  project  labor agreement  to  ensure  that  Alaskan                                                               
workers  are  dispatched  through  Alaskan  hiring  halls.  Also,                                                               
Alaskan apprentices  will be able  to learn their craft  and keep                                                               
their money in the state to  help maintain the economy. A project                                                               
labor agreement will make sure  that Alaska Native hire will take                                                               
place,  which  will help  with  the  unemployment rate  in  rural                                                               
villages.  Make sure  the project  labor agreement  stays in  the                                                               
AGIA  so  that Alaskan  workers  can  help  develop the  gas,  he                                                               
emphasized.                                                                                                                     
                                                                                                                                
6:00:32 PM                                                                                                                    
PAT FALON,  Marketing Representative, Alaska Laborers  Local 341,                                                               
said the gas pipeline is  desperately needed, but Alaskans should                                                               
not  have  to surrender  to  anything  that  does not  include  a                                                               
project  labor  agreement.  This   agreement  will  retain  young                                                               
apprentices in the  state by offering them good  healthcare and a                                                               
retirement  plan. The  project is  all about  Alaska so  it makes                                                               
complete sense  to include  a project  labor agreement  to ensure                                                               
preferred Alaska hire  It is Alaska's gas and  Alaskans should be                                                               
the  primary  labor force.  Consider  how  important this  is  to                                                               
Alaska's economy and make sure  the AGIA includes a project labor                                                               
agreement, he stated.                                                                                                           
                                                                                                                                
6:01:48 PM                                                                                                                    
TAMMIE WILSON,  wife of a  millwright and  mother of a  Local 302                                                               
apprentice, Fairbanks, said those outside  the state do not trust                                                               
Alaskans  so  let  them  know that  Alaskans  believe  in  giving                                                               
Alaskans  priority through  project labor  agreements. Our  well-                                                               
trained and  intelligent workers are invested  in our communities                                                               
and deserve to be at the front  of the line. Please put a project                                                               
labor agreement in the AGIA, she said.                                                                                          
                                                                                                                                
6:02:49 PM                                                                                                                    
MICHAEL FRIBORG, Business  Agent, Local IUOE 302,  said he agrees                                                               
with Mr.  Merrick. The union  work has been  good to him  and his                                                               
family and he'd like  it to go on for local  people and people in                                                               
the rural villages.  The project labor agreement is  the only way                                                               
to ensure local  hire, he said. He has worked  with Bechtel under                                                               
a project  labor agreement  for five years  and the  training has                                                               
been  very powerful.  We  can  make this  project  many times  as                                                               
powerful as that, he stated.                                                                                                    
                                                                                                                                
6:04:30 PM                                                                                                                    
JON BROWN, Local  IUOE 302, Fairbanks, said  Alaska's natural gas                                                               
has the potential  to secure Alaska's future. We  have one chance                                                               
to get  it right, he said.  The state wasn't ready  for TAPS, but                                                               
there's lead-time  now so a  better job  can be done  in training                                                               
the workforce. He listened to  Don Bullock who said that whatever                                                               
Alaska wants in  the pipeline should be put into  the bill and he                                                               
agrees.  We need  a  low tariff  to ensure  the  state gets  fair                                                               
compensation for  its resource and so  that independent companies                                                               
can afford  to ship their gas  in the pipeline, he  said. One way                                                               
to get  a low tariff is  to include a project  labor agreement to                                                               
ensure  a predictable  cost  and  supply of  labor.  Also we  can                                                               
ensure labor stability with no  strike or lockout provisions. The                                                               
workforce will be competent and  trained in standardized programs                                                               
that have class-time  and on-the-job training. The  cost of labor                                                               
will  be known  because  wages  and benefits  will  be agreed  to                                                               
before work  starts. The  use of instate  hiring halls  will give                                                               
Alaskans the  best opportunity  to get  jobs that  are associated                                                               
with  the gas  pipeline.  He  urged the  committee  to include  a                                                               
project labor agreement in the bill.                                                                                            
                                                                                                                                
6:06:58 PM                                                                                                                    
BARBARA HUFF  TUCKNESS, Director of Legislative  and Governmental                                                               
Affairs, Teamsters  Local 959, said  this union  represents about                                                               
5,000  active  and retired  members  throughout  the state.  Many                                                               
members  worked during  construction of  the oil  pipeline and  a                                                               
number  still  work on  the  North  Slope  or in  indirect  jobs.                                                               
However, that's  nowhere close to  the 25,000 members  who worked                                                               
on TAPS  at the peak of  construction. For over 30  years there's                                                               
been talk about construction of a  gas pipeline here and some who                                                               
worked on  the oil pipeline  thought they would move  directly on                                                               
to the  gas related jobs. Today  all have given up  on that idea,                                                               
she  said. The  Murkowski Administration  negotiated a  deal with                                                               
the  oil producers  and  that effort  failed  miserably. Now  the                                                               
Palin Administration  has introduced  SB 104  or AGIA,  and Local                                                               
959  believes  that   this  may  be  the   needed  framework  for                                                               
constructing a  gas pipeline in Alaska.  Some say AGIA is  a huge                                                               
risk, some  say it favors  the pipeline builders rather  than the                                                               
gas owners, and  some say the state should not  tell bidders what                                                               
to bid. But those who represent  workers believe AGIA may well be                                                               
the  vehicle  needed to  move  the  gas pipeline  project  toward                                                               
reality. Our members view AGIA as  a tool for the governor to use                                                               
just as our members need their  tools to perform their jobs every                                                               
day,  she  stated.  The  governor  has  presented  an  aggressive                                                               
schedule  that   contains  quantifiable  results.   The  previous                                                               
committee and  the governor should  be applauded for  including a                                                               
commitment to  negotiate a project  labor agreement,  she stated.                                                               
No company would say this  agreement isn't justified on a project                                                               
of this  magnitude. With  a project labor  agreement in  place it                                                               
will be possible to define  training needs, legally require local                                                               
hire  through local  halls, and  to define  wages, benefits,  and                                                               
working  hours.  The  committee  should  remember  that  the  gas                                                               
pipeline is vital to the  future economic wellbeing of the state.                                                               
There's a window of opportunity  to move forward this legislative                                                               
session;  give the  governor the  tools  to perform  her job  and                                                               
support passage of SB 104, she stated.                                                                                          
                                                                                                                                
6:11:11 PM                                                                                                                    
JIM  LAITI,   Manager,  Plumbers  and  Steamfitters   Local  375,                                                               
Fairbanks, thanked  the legislature and the  Palin Administration                                                               
for their  efforts in  promoting a project.  Right now  the signs                                                               
are encouraging  he said. In late  1969 he was an  apprentice and                                                               
was fortunate  to be in  the middle  of the construction  boom in                                                               
the 1970s. The  best way to prepare Alaskans for  this project is                                                               
to  utilize the  programs, facilities,  and instructors  that are                                                               
currently  in   place.  His  apprenticeship  program,   which  is                                                               
representative  of many  others, requires  nearly 2,000  hours of                                                               
shop  and  classroom  training  and  8,000  hours  of  on-the-job                                                               
mentoring  under  the  supervision  of  qualified  craftsmen.  He                                                               
emphasized that  training will not create  an effective workforce                                                               
without on-the-job  experience as  well. The proven  track record                                                               
of joint  apprenticeship training  committees (JATC)  in training                                                               
and   placing  Alaskans   into  construction   jobs  is   without                                                               
comparison,  he   said.  According  to  2004   statistics,  labor                                                               
management  JATCs  in Alaska  accounted  for  84 percent  of  the                                                               
active registered  apprentices. The apprentices benefit  from the                                                               
culture developed  in Alaska's  oil industry  in recent  years in                                                               
terms of  having a safe  work place, a productive  workforce, and                                                               
producing  a  quality  product that  considers  the  environment.                                                               
We've come a  long way since TAPS  so let's make the  most of our                                                               
experience. Maintain  language for a project  labor agreement and                                                               
ensure use of the proven apprentice programs, he stated.                                                                        
                                                                                                                                
6:14:27 PM                                                                                                                    
TIM  SHARP,   Business  Manager,   Alaska  District   Council  of                                                               
Laborers, said  the 5,000 members strongly  support project labor                                                               
agreements.  Since his  last  testimony  project labor  agreement                                                               
language has  been added  to AGIA  and doing so  takes care  of a                                                               
good part of  the remaining concerns the union had.  All they ask                                                               
now is to  tighten it up to  take out any ambiguity.  He wants to                                                               
hammer  home the  tenets that  will  make or  break a  successful                                                               
project  and  make  sure  the   results  of  developing  Alaska's                                                               
resources will maximize benefits  to Alaskans. With the certainty                                                               
of  training  and a  project  labor  agreement  there will  be  a                                                               
definable goal  to train towards.  We look forward to  turning on                                                               
the training schools  full bore, he said. We can  do that because                                                               
we  know we  have a  deal coming  online. If  we'd had  definable                                                               
goals and  needed verbage to  maximize Alaskan hire  and training                                                               
back  in the  1970s,  we  would still  be  talking  about what  a                                                               
successful  project   that  was.   Union  and   nonunion  Alaskan                                                               
contractors   could  bid   and  multinational   corporations  and                                                               
contractors-union  and  nonunion-participated.  Everybody  got  a                                                               
chance to bid  and Alaskans got a chance to  work, but we weren't                                                               
ready. This time  we can be ready  and we can make  sure that the                                                               
overall project assures benefits and dollars for Alaskans.                                                                      
                                                                                                                                
6:17:37 PM                                                                                                                    
TRAVIS  TOLMAN,  Apprentice  for  Laborers  Local  341,  said  he                                                               
supports  the  pipeline, which  will  help  him provide  for  his                                                               
family. The more he has learned  the more he has became convinced                                                               
that AGIA must include a  project labor agreement because it will                                                               
ensure  Alaskan hire  on the  single most  important project  the                                                               
state has  ever seen. It will  keep the economy strong  and young                                                               
apprentices in  the state with  the security of decent  wages and                                                               
benefits during a time when benefits are hard to come by.                                                                       
                                                                                                                                
6:19:03 PM                                                                                                                    
DENNIS KNEBEL, Business Development  Coordinator, with IBEW Local                                                               
1547,  said  he  is  also a  journeyman  electrician.  He  listed                                                               
projects he worked on that  had project labor agreements and said                                                               
all were good projects that  maximized local hire with good wages                                                               
and good benefits.                                                                                                              
                                                                                                                                
6:20:02 PM                                                                                                                    
VINCE  BELTRAMI,  President,  Alaska  AFL-CIO,  thanked  Governor                                                               
Palin for  sticking to her  guns and seeing AGIA  through because                                                               
this approach  serves all Alaskans. If  it fails it won't  be due                                                               
to a lack of effort by  those seeking to ensure that Alaskans get                                                               
the  best possible  deal for  their  resource. Including  project                                                               
labor   agreement  language   is  the   only  legal   means  that                                                               
preferential  Alaska  hire  can  be achieved  and  it  assures  a                                                               
relationship   with   union   apprenticeship   programs.   Unions                                                               
represent  a large  majority  of  workers who  do  the heavy  and                                                               
highway  construction,  which  are  the skills  needed  for  this                                                               
project. He cautioned  legislators to be leery of  those who have                                                               
made claims to the contrary because  he has not seen any nonunion                                                               
apprenticeship  programs that  are  doing training  in the  heavy                                                               
construction arena. Not having  a collective bargaining agreement                                                               
with unions through  a bona fide project  labor agreement invites                                                               
risk  that AGIA  seeks to  avoid. Project  labor agreements  that                                                               
have been  negotiated with Alaska  building trades  councils have                                                               
successfully built the  largest and most complex  projects in the                                                               
history of the state. Large  multinational and sometimes nonunion                                                               
construction  contractors have  successfully  bid  on and  worked                                                               
under  the  terms  of project  labor  agreements  throughout  the                                                               
state. The  critics of project  labor agreements  don't represent                                                               
employees or pipeline building contractors, he stated.                                                                          
                                                                                                                                
6:22:30 PM                                                                                                                    
SENATOR  WIELECHOWSKI  asked  what percentage  of  the  federally                                                               
registered apprentices in Alaska belong to union programs.                                                                      
                                                                                                                                
MR.  BELTRAMI   said  about   2,000  apprentices   are  federally                                                               
registered under  the Bureau of  Apprenticeship and  Training and                                                               
85  percent are  enrolled in  union apprenticeship  programs that                                                               
include  1,000   hours  of  classroom  instruction   as  well  as                                                               
supervised on-the-job training.                                                                                                 
                                                                                                                                
SENATOR  WIELECHOWSKI  asked what  percentage  of  the heavy  and                                                               
highway construction workers are union members in Alaska.                                                                       
                                                                                                                                
MR. BELTRAMI  said it's about  the same. Roughly 85  percent have                                                               
the  experience to  do  the  type work  that  will  be needed  to                                                               
construct a gas pipeline.                                                                                                       
                                                                                                                                
SENATOR  WIELECHOWSKI  asked  what percentage  of  the  employees                                                               
hired  through  the  project  labor  agreement  for  the  missile                                                               
defense site were Alaska hire.                                                                                                  
                                                                                                                                
MR. BELTRAMI said he understands  that there was approximately 90                                                               
percent  Alaska hire.  That included  12  percent Native  Alaskan                                                               
hire, 5 percent veteran hire and 5 percent female hire.                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI asked  if Bechtel  and Fluor  are typically                                                               
union shops.                                                                                                                    
                                                                                                                                
MR. BELTRAMI said not usually,  but they don't mind working under                                                               
project labor agreements.                                                                                                       
                                                                                                                                
SENATOR  WIELECHOWSKI  asked if  he'd  gotten  any feedback  from                                                               
Fluor and  Bechtel regarding  the experience  they had  using the                                                               
project labor agreement.                                                                                                        
                                                                                                                                
MR.  BELTRAMI advised  that  he  was a  prime  negotiator on  the                                                               
missile  defense   project  labor  agreement  when   he  was  the                                                               
president of  the building trades  for Anchorage.  Both companies                                                               
sent letters expressing pleasure  with the professionalism of the                                                               
craftsmen  they were  associated  with on  the  job. Things  were                                                               
ahead  of schedule  and under  budget and  safety was  top notch.                                                               
They attributed  it to  the relationship  with the  unions. There                                                               
really  weren't any  substantive  issues at  all  and over  1,000                                                               
people worked on the project.                                                                                                   
                                                                                                                                
6:25:29 PM                                                                                                                    
SENATOR  WIELECHOWSKI asked  if  his experience  is that  project                                                               
labor agreements have been successful in Alaska.                                                                                
                                                                                                                                
MR. BELTRAMI  said he isn't  aware of  even one that  hasn't been                                                               
successful.  Seven  or eight  such  projects  have been  done  in                                                               
Juneau and CBJ has made  using project labor agreements a policy.                                                               
Right  now the  new high  school and  the hospital  expansion are                                                               
being done under project labor agreements.                                                                                      
                                                                                                                                
6:26:41 PM                                                                                                                    
DAVID GOTTSTEIN,  Co-Chair of Backbone, Anchorage,  said AGIA may                                                               
not be in perfect  shape but it is a good  platform to work from.                                                               
It provides  for a competitive  and fair process for  bidders and                                                               
the more  vibrant the  bidding pool the  more the  winning bidder                                                               
will be  able to offer. Some  say that the producers  are arguing                                                               
that it  is exclusive and  that a competitive process  results in                                                               
one  winner.  In  the  first  case,  most  competitive  processes                                                               
pressure  participants   to  submit  their  best   offer  thereby                                                               
achieving better results. Second,  the inducement will reduce the                                                               
risk  of the  project and  attract more  bidders that  will offer                                                               
more in  economic terms.  Third, contrary  to what  the producers                                                               
say, they are not the only  companies that are qualified to build                                                               
the pipeline.  In other places gas  lines are built and  owned by                                                               
independent pipeline  companies and  not producers.  For example,                                                               
Warren Buffet and  MidAmerican are one of  several investors that                                                               
are ready  to offer billions  of dollars  in equity to  start the                                                               
project. Fourth,  once the project  is chosen, the  producers are                                                               
required  under  their  leases  to   commit  their  gas  or  risk                                                               
forfeiture. Exxon  wants everyone to  believe that only  they can                                                               
decide when to  market our gas, but they are  legally required to                                                               
sell our  gas when  the market  is ready to  purchase it.  It's a                                                               
game of chicken and the producers  hope we take the bait and veer                                                               
from  the path  of maximum  opportunity for  the state.  Don't be                                                               
afraid  to offer  Pt Thomson  gas because  there's a  high chance                                                               
that the  supreme court will  affirm the  administrative decision                                                               
canceling the leases.  Holding back offering the gas  to a market                                                               
allows  the  producers  to  win,   but  sound  business  judgment                                                               
dictates  taking the  probable  course and  mitigating the  small                                                               
chance  of failure.  In the  worst case,  sufficient gas  will be                                                               
made  available for  a smaller  project that  is economic,  which                                                               
we're  told  might  be  only  1 bcf/day.  More  than  likely  the                                                               
producers will fall in line so  as to not be left behind. Holding                                                               
back would  further risk their  leases and generate the  wrath of                                                               
Congress and the  American people. If the court  strikes down the                                                               
lease cancellations  then the break-up  fee could be paid  to the                                                               
winning bidder as  a consolation. But the  benefits of proceeding                                                               
and the  likelihood of  success far out  weigh the  likelihood of                                                               
failure  and  the  associated  costs.  "Let's  not  be  chicken."                                                               
Getting our  gas to market to  benefit all Alaskans is  what AGIA                                                               
is all about.                                                                                                                   
                                                                                                                                
CHAIR FRENCH  thanked the public  for taking time to  testify and                                                               
announced he would hold SB 104 in committee.                                                                                    
                                                                                                                                
There being  no further  business to  come before  the committee,                                                               
Chair French adjourned the meeting at 6:31:05 PM.                                                                             
                                                                                                                                

Document Name Date/Time Subjects